India’s rich cultural, architectural as well as intellectual heritage has not only attracted tourists but at the same time has led to a great inflow of corporate clients which have added to the growth of the hotel industry in the past decade. But business in hotel industry is cyclical in nature. Any change in the economy, affects the occupancy rate, delays in upcoming projects and likely decrease in room rates.

Recession is the most dreaded word of the new millennium. It is no longer an urban disease but has seeped to the lowest level. It hasn’t spared the hospitality industry either. And if this was not enough, the recent attack on the The Taj Hotel has done it all.

Not only has it made the foreign tourists apprehensive, it has also haunted the domestic travelers .As a result there has been a drop in overseas visitors to the country in November 2008 by 2.1 percent as compared to  November 2007 according to the recent official estimates released by Ministry of Tourism. The occupancy rate and tariffs are likely to fall in the walk of the ongoing slow down in the economy and the continued terrorist attacks.

This all sounds too gloomy. But hold the thought for the moment. Don’t we always witness that every downfall gives rise to a new success formula? So are we going to find one this time too?

“Cost Cutting” is the new mantra which is resounding in this slowdown. India has attracted huge investments on the basis of the cheap lab our. Then why not tap this resource and make the industry profitable. If the recession has a silver lining it is that the low budgets hotel have gained most out of it. Not only that, established hotels are also concentrating on improving efficiencies and reducing costs. Hotel companies moving quickly to pare overhead at the corporate and property levels will not only save money but will position their enterprises to be more dominant players for the next cycle.

Corporate world has also started to squeeze their budgets for employees traveling and lodging. Why not provide them with the basic necessities by cutting the flares (complementary products like swimming pool, gym, spa etc.)? Why not reach them via enhanced Internet communication? Why not give them the facility to register online? This will help cut costs, enhance speed, keep the inventory up to date, improve margins, decrease distribution costs,  low or no-cost communications, sales material, room descriptions and photos, distribution of marketing collateral, copies of advertisements, access to telephone directories, menus, e-mail accounts and much more. 

Well this sounds positive. Isn’t it? So let’s continue this quest for other arenas where hoteliers can find solace in this gloomy era.